Why is brand loyalty so important?
Brand loyalty goes beyond brand preference, it's about creating a meaningful relationship between the brand and the consumer. The bond not only grows repeat orders and LTV of customers, but it can also build advocacy and referrals – making it a brand investment worth taking seriously, especially in the face of rising new customer acquisition costs.
Navigating a cookieless future
Another key reason for investment in brand loyalty is the upcoming deprecation of cookies.
Driven by moves to address data privacy concerns, in 2024, Google will stop processing third party cookies, blowing a hole in many brands data strategy. Successful brands are already establishing robust data foundations to ensure the impact of the change is minimal and the benefits are seen across marketing functions.
First party data collection is forming a huge part of the response to cookie updates, allowing brands to personalise experiences and collect data without relying on third-party cookies.
Could digital memberships be the answer to challenges?
Born from a marriage of subscription models and loyalty programmes, digital memberships offer consumers exclusive benefits beyond traditional digital reward programmes. Paid for digital membership allows brand fans access to improved delivery options, special events, exclusive resell, enhanced customer service options and rewards for behaviour change.
Digital memberships are seeing success in driving deeper brand loyalty with consumers 59% more likely to choose them over a competitor.
Gamification in loyalty
Gamification in loyalty programmes isn’t new, behavioural based rewards have been part of offline loyalty programmes for a while now. Supermarkets, fashion brands, department stores and payment providers are engaging consumers with task-oriented loyalty schemes, rewarding shoppers in establishing healthy habits. Asda is a great example – rewarding online shoppers for healthier basket choices with additional points and rewards.
Charitable giving is another area of focus, which has risen post-Covid.
Fashion, beauty, food and beverage brands are rewarding customers for conscious consumption. They’re embedding members-only resale into loyalty schemes, allowing consumers to convert points into charity donations and enabling people to track their carbon-busting.
Circular commerce & buyback
The global second-hand apparel market is projected to reach $351bn by 2027 – with online sales being the fasted-growing area. Resale is now a key decision-making factor for many online shoppers, especially Gen Zer's. This has made the use of buyback opportunities, community trading and virtual wardrobing by brands to increase brand engagement and loyalty much more common.
Brands such as British luxury watch brand Subdial have leveraged the change in consumer behaviour, by creating a space for fans to buy, sell, insure, service, collect and learn about watch collecting. They have also launched an online tracker displaying different models’ real-time prices alongside a forum for enthusiasts, targeting wannabe collectors.
The future of brand loyalty
The future of brand loyalty lies in creating integrated, experiential, and value-driven journeys for customers.
By combining some of the elements we’ve discussed here such as digital memberships, gamified rewards, and purpose-driven initiatives, brands can tackle the brand promiscuity we see more and more of in consumer behaviour.
As the retail landscape continues to evolve in the wake of the cost-of-living crisis, brands that thrive will be those that understand the importance of building brand loyalty through deep, genuine relationships with their customers.